1.

Succession – is the mode of acquisition by virtue of which the property, rights and obligations to

the extent of the value of the inheritance of a person, are transmitted through his death to another

or others either by his will or by operation of law.

2. Decedent – the person whose property is transmitted through succession whether with or without

a will.

3. Heir – person called to the succession either by the provision of a will or by the operation of law.

4. Devisee – person who receives real property by virtue of a will.

5. Legatee – person who receives personal property by virtue of a will.

6. Testamentary succession – transfer of properties through an executed will (testament).

7. Intestate succession – transfer of properties where there is no will or if there is a will, it is void or

nobody succeeds in the will.

8. Mixed succession – transfers made partly by a will and partly by operation of law.

9. Executor –person or trust company named in the will to carry out its provisions.

10.Administrator – person or trust company appointed by the court to administer and distribute the

estate where no executor was named in the will or if executor does not want to act.

11. Legitime – the portion of the decedent’s estate which the law reserves to his compulsory heirs. The

portion of the decedent’s estate in excess of the legitimes is called free portion.

12. Extrajudicial settlement of the estate – out of court settlement entered into by the heirs transferring

and distributing the property left by the decedent.

13. Transfer tax – a tax imposed upon the transfer of property ownership. It is a privilege tax which is

imposed on the act of passing ownership of property and not a tax on the property itself.

14. Estate tax – a tax levied upon the transfer of the net estate of a decedent to his heirs.

15. Inheritance tax – an imposition created by law on the privilege to receive property.

(Note: Presently, there is no inheritance tax imposed by law. Only estate taxes are imposed.)

SEC. 2. RATE OF ESTATE TAX. – The net estate of every decedent, whether resident or non-resident

of the Philippines, as determined in accordance with the NIRC, shall be subject to an estate tax at

the rate of six percent (6%).

SEC. 3. THE LAW THAT GOVERNS THE IMPOSITION OF ESTATE TAX. – It is a well-settled rule that

estate taxation is governed by the statute in force at the time of death of the decedent. The estate
tax accrues as of the death of the decedent and the accrual of the tax is distinct from the obligation

to pay the same. Upon the death of the decedent, succession takes place and the right of the State

to tax the privilege to transmit the estate vests instantly upon death. Accordingly, the tax rates and

procedures prescribed under these Regulations shall govern the estate of decedent who died on or

after the effectivity date of the TRAIN Law.